A digital poster for the London Dungeon featuring the sudden transformation of Queen Mary into a zombie-like character has been banned by the advertising watchdog for scaring children.

The ad, developed by the agency Farm, ran on digital screens throughout London Underground stations.

Over the period of a few seconds an image of a serene Queen Mary – dubbed "Bloody Mary" for her persecution of Protestants – sitting on a chair, morphs into a zombie-like character with sunken eyes, pale skin, a wide-open mouth and a scarred face.

The Advertising Standards Authority received four complaints that the ad was likely to frighten and distress children and was "inappropriate for display in an untargeted medium" such as digital escalator panels.

One complainant said her eight-year-old had been frightened by it, while another had seen it "visibly shock and upset several children".

The ASA said that the ad could be seen by anyone using the London Underground and that it was likely to "startle and frighten young children".

"We were of the view that the ad seemed to be setting out to scare and had overstepped the limit of acceptability in doing so because, although not frightening for adults, the image was likely to be shocking to young children and to cause them fear or distress without good reason," added the regulator. "We concluded that the ad was inappropriate for display in an untargeted medium."

Merlin Entertainments, which runs the London Dungeon, said that in order to "avoid causing fear and distress" it had followed London Underground's guidelines in "avoiding flames and excessive, dripping or running blood".

The company said that it had planned to run the ad again on the London Underground during the summer school holidays and Halloween.

It was meant to show the "dark side of [Queen Mary's] personality and portray her as a villain", Merlin added. The company said that the ad was "obviously historical and in no way irresponsible or gratuitous".

• To contact the MediaGuardian news desk email editor@mediaguardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000.

• If you are writing a comment for publication, please mark clearly "for publication".